Watford have sacked manager Marco Silva and are set to replace him with former Malaga boss Javi Gracia.

The Portuguese was linked with Everton in October and Watford rejected approaches from Goodison Park.

Everton even launched a £10m bid for Silva to replace Ronald Koeman and despite keeping hold of their boss, the saga affected Watford's form.

Watford were fifth at the time of Everton's interest following an excellent start to the season, which saw them lose just two of their first nine games. They have managed just one win in their last 11 Premier League matches since.

Former Malaga boss Gracia is set to take over in the next 24 hours.

Javi Gracia gestures (Image: Epsilon)

Watford manager Marco Silva looks dejected (Image: REUTERS)

Vardy celebrates for Leicester (Image: Plumb Images)

Saturday's 2-0 defeat at Leicester was the final straw, although Watford remain 10th in the Premier League.

A club statement suggested the Everton approach was at fault for Watford's dip in form and Silva's subsequent exit.

"This has been a difficult decision and one not taken lightly. The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services we would have continued to prosper under his leadership," it read.

"The catalyst for this decision is that unwarranted approach, something which the Board believes has seen a significant deterioration in both focus and results to the point where the long-term future of Watford FC has been jeopardised.

"For the security and success of the football club, the Noard believes it has to make a change."

Silva reacts (Image: Getty)

Silva arrived in the Premier League in January last year at relegation-threatened Hull.

He could not keep the Tigers in the top-flight but their performances saw Silva earn the job at Vicarage Road.